Consumer mood expected to remain unchanged in Aug.
NEW YORK (AP) — Economists believe the confidence of the U.S. consumer remained virtually unchanged between August and July during the ongoing economic recovery.
They expect the private research group The Conference Board to report that its monthly consumer confidence index will be at 66 in August compared with 65.9 in July, according to FactSet.
The indicator is watched closely because consumer spending, including major purchases like health care, accounts for 70 percent of U.S. economic activity.
The Conference Board will release its report Tuesday at 10 a.m. Eastern.
The report is based on a survey conducted Aug. 1 to Aug. 16 with about 500 randomly selected people nationwide.
Despite several brief spikes, the index remains well below the 90 reading that indicates a healthy economy — a level it hasn't reached since the recession began in December 2007. But it's far above the level of 40 reached in October 2011 and the all-time low of 25.3 reached in February 2009.
Since the beginning of the year, the index has wavered, falling in January and rising in February, before falling for four straight months. It rose again in July.
The economy is still stabilizing and job growth has become consistent, albeit slow.
One area of improvement has been the housing market. Sales of new homes in the U.S. rose 3.6 percent in July to match a two-year high reached in May, according to last week's Commerce Department report. It was the latest sign of a steady recovery in the housing market.
And factory output climbed in July for the second straight month, according to a report issued last week from the Federal Reserve. That boossted hopes that manufacturers have recovered from a slowdown in early summer. A jump in auto production was a key reason for the gain.
Better growth also boosted hiring last month. Employers added 163,000 jobs in July, the most since February. Job gains averaged only 73,000 jobs a month from April through June, not enough to keep up with a rising population. The unemployment rate increased to 8.3 percent from 8.2 percent in June.
Still, more growth is needed to produce enough jobs to put a dent in the unemployment rate, which stands at 8.3 percent. The economy grew at an annual rate of 1.5 percent from April through June, down from 2 percent in the first quarter and 4.1 percent in the fourth quarter of 2011.
Another worry is that gas prices, which fell sharply from a peak of $3.94 in early April, started to surge again in recent weeks. In fact, gas prices at the pump rose 19 cents to $3.71 during the period that captures the survey. That could put more financial pressure on low and middle income shoppers.
Merchants are hoping for stronger job growth heading into the final months of the year. Merchants are in the critical stretch of the back-to-school selling season, which is the second most-important season behind the winter holidays. But the season, which began in mid-July and ends mid-September, so far has been mixed.
"There is nothing in the economic data that causes consumer attitudes to have improved in the last month," said Wells Fargo Securities senior economist Mark Vitner.